On Singapore Economy now..

SINGAPORE, Oct 20 - Singapore's economy, which fell into a recession in the third quarter, will see growth remaining weak for "several quarters" though inflationary pressures will take time to ease, the country's trade minister said on Monday.

Trade Minister Lim Hng Kiang said in parliament Singapore's exports and manufacturing activity have slowed on the back of the financial crisis, and that the country's jobless rate for 2008 will be higher than the 2.1 percent seen last year.

"We must be prepared for weaker growth in the next few quarters, and possibly longer," Lim said.

He said while Singapore's inflation, which hit a 26-year high of 7.5 percent in April, May and June, will continue to ease, it will take time for the decline in prices to be reflected in the consumer price index.

"I must caution that inflation will continue to be sticky for the next few months," Lim said, adding authorities were "confident inflation will revert back to 2-3 percent" next year.

Singapore's central bank said on Oct. 10 it expects inflation to remain within the 6-7 percent target for 2008, and forecast inflation to ease to 2.5-3.5 percent in 2009.

Singapore's Prime Minister Lee Hsien Loong said on Friday the city-state had fallen into recession and the economic outlook over the next 12 months was uncertain.

The Southeast Asian nation last sank into a recession -- defined as two consecutive quarters of economic contractions -- in 2002 in a global downturn after the Sept. 11, 2001 attack.

The export-dependent economy will suffer from weaker demand in key export markets as global economies slow following a credit crisis that has seen the fall of banks in the U.S. and Europe.

Singapore's three local banks DBS , United Overseas Bank and Oversea-Chinese Banking Corp are well capitalised and their asset quality remains strong despite the problems in the United States, Lim said.

"Banks and insurance companies in Singapore do not have large exposures to either U.S. mortgage-related securities or to the institutions that have failed," said Lim, who is also deputy chairman of the city-state's central bank.

He said the number of retrenchments in Singapore has stayed at the same level as in previous quarters, but it may climb as the economy slows further.

"Moderation of employment growth is expected in the second half of 2008, and through to 2009," Lim said.

In a nod that slowing growth posed a greater risk to Singapore's economy than rising prices, Singapore's central bank eased monetary policy for the first time since 2003 in October. (Reporting by Koh Gui Qing and Kevin Lim; Editing by Neil Chatterjee)
Source: Yahoo